LONDON - The Blackstone Group has agreed to buy a private equity business owned by Credit Suisse.
The sale by Credit Suisse, which is to report first-quarter results on Wednesday, comes as the bank reduces its presence in so-called alternative investments like private equity funds.
Under the terms of the deal, announced late on Monday, Blackstone will buy Strategic Partners, a private equity business owned by Credit Suisse, which is based in Zurich. The unit specializes in buying stakes in funds from other investors and has $9 billion of assets under management. The price of the acquisition was not disclosed.
Blackstone’s chief operating officer, Hamilton E. James, said the deal would help strengthen the firm’s existing operations as it continued to diversify away from leveraged buyouts.
Last year, Credit Suisse announced that it was planning to sell Strategic Partners, which was created in 2000, as part of a wider pullback from private equity investments because of uncertainty related to the so-called Volcker Rule. The American law limits the investments by financial institutions in the likes of private equity and hedge funds in an effort to reduce banks’ exposure to risky trading activity.
While Credit Suisse is expected to maintain its largest investment banking operation, it also recently has moved to expand its profitable wealth management division.
The bank agreed last month to buy Morgan Stanley’s wealth management unit in Europe, the Middle East and Africa. That unit has around $13 billion in assets under management and will increase the existing $840 billion that Credit Suisse already manages for wealthy clients.
The deal for Strategic Partners is expected to close by the third quarter of this year.
